International Trade Law News

Published by Jacobson Burton Kelley PLLC

By Doug Jacobson, Jacobson Burton PLLC

Labels: GSP

The U.S. Senate last night passed H.R. 2832, legislation that will renew the expired Generalized System of Preference (GSP) program and extend the program until July 31, 2013. Because the Senate version included an amendment to extend the Trade Adjustment Assistance program, the House will have to vote on the Senate version of the bill before it is sent to President Obama for signature. Nevertheless, the bill should be enacted into law soon.

Importantly, the legislation provides that the GSP program will be renewed retroactively for all GSP eligible entries made after December 31, 2010. Once the bill has been signed into law CBP will issue instructions on how to obtain refunds for all GSP eligible imports entered during the past year.

When the GSP program expired in the past U.S. Customs and Border Protection (CBP) automatically liquidated or reliquidated items flagged in the ABI system with the GSP Special Program Indicator (SPI) "A" as duty-free and issued refunds to importers without the need to submit individual claims.

Nevertheless, U.S. importers should ensure that their customs brokers continue to use the GSP Special Program Indicator for eligible entries and to monitor their post December 31, 2010 GSP entries to ensure that the correct refunds are received. The bill provides that any unflagged GSP eligible entries must be submitted to CBP within 180 days after the enactment of this bill.

U.S. importers should also aware that the GSP renewal bill contains an increase in the Merchandise Processing Fee (MPF) on ALL applicable U.S. imports starting on October 1, 2011. The MPF will increase from 0.21% ad valorem to 0.3464% ad valorem. However, the MPF paid on a single entry will still be capped at $485.

Labels: Customs, GSP

Today, United States Trade Representative Ron Kirk released the following statement on the need to renew and extend the GSP, TAA and ATPA trade programs:

“I am disappointed that Congress has not acted to extend Trade Adjustment Assistant (TAA), the Andean Trade Preference Act (ATPA), and the Generalized System of Preferences (GSP). These are important programs that support workers and help U.S. businesses compete in the global marketplace. As a result of this inaction, 155,000 Americans will go without the assistance they were promised under TAA to help retrain for a new job,” said U.S. Trade Representative Ron Kirk. “Farmers and workers in Colombia will lose access to the U.S. market just as they are recovering from severe floods. At the same time, the continuing absence of ATPA and GSP benefits raises costs for American consumers and businesses as well as farmers in some of the world’s poorer countries.”

“We encourage Congress to extend these three programs as soon as possible and to do so for substantially more than a few months. We are committed to working with Congress to secure reauthorization of these essential trade programs.”

As we reported, the U.S. Congress adjourned in December 2010 without renewing the Generalized System of Preferences (GSP) program, which expired on December 31, 2010. While Congress enacted short-term extensions of ATPA and TAA, both programs expired on February 12, 2011.

The Coalition for GSP has created the "Renew GSP Today" blog, which contains useful information and updates on the importance of GSP renewal to U.S. companies and consumers. On a lighter note, since today is Valentine's day, the blog notes that $150 million worth of candy and chocolate entered the U.S. under the GSP program in 2010, accounting for savings of more than $8.5 million in import duties.

Labels: GSP, Miscellaneous

Things are not looking very good right now for renewal of the Generalized System of Preferences (GSP), the long-standing duty preference program that expired on December 31, 2010.

Today’s Politico contains a story providing extensive background on the political issue involving sleeping bags that delayed the Senate vote on the GSP renewal bill passed by the House during the lame-duck session. The article indicates that Senator Jeff Sessions (R-AL), who has placed a hold on the extension bill, shows no signs of backing down and as a result the future of the GSP program remains in "limbo."

As we reported, the U.S. Congress adjourned on December 22, 2010 without renewing the Generalized System of Preferences (GSP) program, which expires on December 31, 2010, or passing the numerous miscellaneous tariff bills (MTBs) that eliminate customs duties on certain imported products.

While the Senate passed a scaled down version of the House-passed bill that included the GSP renewal (H.R. 6517) the final version of that bill which passed the Senate and was agreed to by the House did not contain the language renewing GSP or enacting the MTBs.

As a result, on January 1, 2011 U.S. importers of GSP-eligible merchandise started having to pay normal U.S. customs duties until the program is renewed by Congress.

The last time that the GSP program expired Congress renewed the program retroactively, which allowed importers to obtain refunds of any customs duties paid. However, the refund process takes time and needs to be closely monitored by the importers.


In the meantime, importers should work closely with their customs brokers to ensure that entries of GSP-eligible products are flagged with the GSP Special Program Indicator indicator (SPI) "A". Using that SPI will help facilitate any refunds when (or if) GSP is renewed retroactively.

Labels: GSP

The U.S. Congress adjourned today without renewing the Generalized System of Preferences (GSP) program, which expires on December 31, 2010, or passing the numerous miscellaneous tariff bills (MTBs) that eliminate customs duties on certain imported products.

While the Senate late today passed a scaled down version of the House-passed measure that included the GSP renewal (H.R. 6517) the final version of that bill which passed the Senate and was agreed to by the House did not contain the language renewing GSP or enacting the MTBs.

As a result, starting on January 1, 2011 U.S. importers of GSP-eligible merchandise will have to pay normal U.S. customs duties until further notice.

The last time that the GSP program expired Congress renewed the program retroactively, which allowed importers to obtain refunds of any customs duties paid. However, the refund process takes time and needs to be closely monitored by the importers.

In the meantime, importers should consult with their customs brokers to ensure that entries of GSP-eligible products are flagged with the GSP Special Program Indicator
indicator (SPI) "A". Using that SPI will help facilitate any refunds that may be authorized by Congress next year.

In the meantime, stay tuned for more information.

Labels: GSP

U.S. importers, trade associations and foreign governments have until 5:00 p.m. on March 25 to submit comments to the Office of the U.S. Trade Representative concerning the eligibility of certain goods for duty-free treatment under the Generalized System of Preferences. These comments may seek to preserve, reinstate or revoke this treatment.

The U.S. GSP program includes provisions, known as competitive need limitations, that trigger the removal of duty-free treatment if imports of a covered product from a beneficiary developing country exceed certain limits. For calendar year 2009, these limits are (a) 50% of the value of total U.S. imports of the product from all countries or (b) $140 million. Once the president determines that a CNL has been exceeded, GSP duty-free treatment for the subject article must be terminated no later than July 1 of the next calendar year.

However, CNL waivers are permitted for products that are imported in de minimis quantities. In addition, duty-free treatment may be reinstated for products that no longer exceed the CNL.

USTR is therefore accepting comments from interested parties on the following potential modifications to GSP eligibility, based on import data for calendar year 2009.

De Minimis Waiver - The president may waive the 50% CNL with respect to an eligible article imported from a BDC if the value of total imports of that article from all countries did not exceed $19.5 million.

Redesignation Request - If imports of an eligible article from a BDC ceased to receive duty-free treatment due to exceeding a CNL in a prior year, the president may redesignate that article for duty-free treatment if imports in the 2009 did not exceed the CNL.

Potential Revocation of a Current CNL Waiver - A CNL waiver remains in effect until the president determines that it is no longer warranted due to changed circumstances. However, the president should revoke any CNL waiver that has been in effect with respect to an article for five years or more if the BDC's exports of that article to the U.S. exceeded (a) $210 million (1.5 times the applicable CNL value limit) or (b) 75% of the value of total U.S. imports of that article.

A list of products that may qualify for one of these actions can be found on USTR's Web site.

Labels: GSP

Labels: ATPA, GSP

This afternoon the U.S. House of Representatives passed H.R. 4284, legislation to extend the expiring Generalized System of Preferences (GSP) and the Andean Trade Preferences Act (ATPA) trade preference programs until December 31, 2010.

The debate on the House floor made clear that the House intends to consider GSP and other trade preference reform in 2010.

The bill now moves to the Senate where supporters hope the bill will be considered before the Christmas recess.

Labels: GSP

U.S. Trade Representative Ron Kirk today announced the results of the 2008 Annual Review of the Generalized System of Preferences (GSP) program. The following is a summary of the results:

• De minimis waivers were granted on 112 products from 16 beneficiary countries.

• Added two agricultural products to the list of products eligible for GSP duty-free export into the United States from all beneficiary countries.

• Determined that 12 products from six beneficiary countries should be excluded from the GSP program since they exceeded the competitive need limitation.

• Unfortunately, the Obama Administration did not grant any of the numerous requests for redesignation of products that had been excluded from GSP since they exceeded the competitive need limitation in previous years.
  

In 2008, the United States extended duty-free treatment under the GSP program to imports worth $31.7 billion from eligible beneficiary countries.

The complete results of the 2008 GSP Annual Review are available here.

Labels: GSP

The White House today held a signing ceremony for President Bush to sign H.R 7222, legislation recently passed by Congress that will extend the Andean Trade Preferences Act (ATPA) and Generalized System of Preferences (GSP) program until December 31, 2009. Both programs would have expired on December 31, 2008 if they had not been renewed.

The President took the opportunity to press for the approval of the U.S.-Colombia Trade Promotion Agreement that was signed in November 2006, but is still waiting for Congressional approval.

Labels: ATPA, GSP

In addition to passing the bailout bill on the last day of this session of Congress, the House and Senate did U.S. importers a favor by passing H.R 7222, legislation that will extend the Generalized System of Preferences (GSP) program and the Andean Trade Preferences Act (ATPA) until December 31, 2009. Both programs would have expired on December 31, 2008 if they had not been renewed. The bill has been sent to President Bush and will be signed soon.

H.R. 7222 also makes several to the African Growth and Opportunity Act (AGOA), including repealing the “abundant supply” requirement that restricts least-developed AGOA countries’ ability to use AGOA’s flexible “third country fabric” rule and reinstating Mauritius’ eligibility to use the program’s “third-country fabric” provisions.

The legislation also establishes a Dominican Republic "2 for 1" textile and apparel allowance program to be developed and administered by the Secretary of Commerce. Under the program, when producers purchase a certain quantity of qualifying U.S. fabric (2 square meter equivalents or “SMEs”) for apparel production in the Dominican Republic, they will receive a credit (equivalent to 1 SME). This credit can then be used to ship a corresponding quantity of eligible apparel (pants and other bottoms) from the Dominican Republic to the United States duty-free regardless of the origin of the fabric from which the apparel product is made.

Labels: GSP

The U.S. Trade Representative (USTR) has published a notice in Monday's Federal Register announcing the initiation of a review to consider designating the Republic of Kosovo as a beneficiary developing country under the Generalized System of Preferences (GSP) program. Public comments on whether Kosovo meets certain eligibility criteria for designation as a BDC must be submitted to USTR by October 17, 2008.

The U.S. recognized the Republic of Kosovo as a sovereign state on February 18, 2008 after it declared its independence from Serbia. For country of origin marking purposes, merchandise produced in Kosovo must be marked as "Kosovo" or "Republic of Kosovo" when entering the U.S.

As we have reported, the GSP program is set to expire on December 31, 2008. While the House of Representatives has passed legislation (H.R. 6560) extending GSP for an additional year, the bill has not yet been considered by the Senate.

Labels: GSP

The Office of the United States Trade Representative (USTR) has published a notice announcing the petitions that have been accepted for consideration in the Generalized System of Preferences (GSP) 2008 Annual Review and the schedule for review.

The USTR has indicated that it will review requests submitted by parties in Egypt, Ecuador Turkey, Thailand, Uruguay and the Philippines to add 11 products to the list of GSP eligible products. USTR rejected 30 other petitions submitted requested to add or remove products from GSP.

The schedule for the 2008 annual review will be as follows:

• October 3, 2008--Due date for submission of pre-hearing briefs and requests to appear at the GSP hearing;
  
• October 10, 2008--ITC will release import data on eligible products;
• October 20, 2008--GSP Subcommittee Public Hearing on all product petitions accepted for the 2008 GSP Annual Review;
  
• November 3, 2008--Due date for submission of post-hearing briefs;
• November 13, 2008--Due date for submission of new petitions to grant waivers to CNLs for products exceeding the CNLs in 2008.
  
• December 2008--ITC scheduled to publish report on products for product petitions in the 2008 GSP Annual Review;
• June 30, 2009--Modifications to the list of articles eligible for duty-free treatment under the GSP resulting from the 2008 Annual Review will be announced on or about June 30, 2009, in the Federal Register and any changes will take effect on the effective date announced.

Unless renewed by Congress, the U.S. Generalized System of Preferences (GSP) program will expire on December 31, 2008. Language that would extend GSP for an additional year, or until December 31, 2009, was included in H.R. 6560, a bill that passed the House and was sent to the Senate in July.

Labels: GSP

As we have reported, the U.S. Generalized System of Preferences (GSP) program is set to expire on December 31, 2008.

Language that would extend GSP for an additional year, or until December 31, 2009, was included in H.R. 6560, a bill that passed the House last week to establish an earned import allowance program under the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act and make other technical changes to trade preference and other programs.

H.R. 6560 has been referred to the Senate Finance Committee for consideration.

The House action to extend GSP was applauded by GSP Coalition. “A wide range of American companies, trade associations, and anti-poverty organizations has been urging Congress to renew the GSP program. Timely action by the House recognizes the adverse impact that allowing GSP to expire would have not only on developing countries, but on American families, workers, and farmers,” said Laura Baughman, Executive Director of the Coalition for GSP, a group of U.S. companies and trade associations organized to educate policy makers and others about the important benefits of the GSP program. The GSP Coalition has called for the Senate to quickly renew GSP when it returns from recess in September.

Over the past few years, GSP has either been renewed shortly before it expired or renewed retroactively. Stay tuned.

Labels: GSP

Today the Office of the U.S. Trade Representative (USTR) announced the results of the 2007 Annual Review of the Generalized System of Preferences (GSP).

As a result of this year’s review, duty-free treatment for the vast majority of products covered by GSP will continue. In addition, the GSP eligibility for 99 exports from specific countries will continue, even though the quantities of those exports exceeded statutory thresholds in 2007. As authorized by the GSP statute, the Administration will waive those thresholds known as “competitive need limitations” (CNLs).

While adding three types of aluminum products to the list of GSP-eligible products from all beneficiary countries, the USTR determined that 25 products from beneficiary countries can compete effectively in the U.S. market without duty-free treatment and will no longer be eligible under the GSP program. This group includes 21 products that exceeded the statutory CNLs and four products that have had waivers to the CNLs for the past five years and are now subject to statutory “super-competitiveness” thresholds.

The USTR's Annual Review also involved an analysis of petitions to withdraw or limit a country’s GSP benefits for not meeting GSP eligibility criteria. These criteria include the extent to which a country provides adequate and effective protection of intellectual property rights (IPR) and whether a country is taking steps to ensure internationally recognized worker rights. Several beneficiaries remain under active scrutiny because of such concerns, including: Lebanon, Russia and Uzbekistan regarding their lack of IPR protection, and Bangladesh, Niger, the Philippines and Uzbekistan regarding worker rights.

The U.S. GSP program, which provides duty-free treatment for nearly 5,000 products exported to the United States from 132 beneficiary developing countries, will expire on December 31, 2008 unless renewed by Congress.

Update: The USTR also published in the Federal Register a notice announcing the initiation of a review to consider designating Vietnam as a beneficiary developing country under the GSP program. Public comments on whether Vietnam meets certain eligibility criteria for designation as a BDC must be submitted to USTR by August 4, 2008.

Labels: GSP, Vietnam

Although the Generalized System of Preferences is scheduled to expire on December 31, 2008 unless renewed by Congress, the U.S. Trade Representative (USTR) published a notice in today's Federal Register announcing the initiating of the 2008 Annual Generalized System of Preferences (GSP) to modify the list of products that are eligible for duty-free treatment under the GSP program, to modify the GSP status of certain GSP beneficiary developing countries because of country practices and competitive need limitation (CNL) waivers.

All petitions to modify the list of articles eligible for duty-free treatment under GSP or to review the GSP status of any beneficiary developing country, with the exception of petitions requesting CNL waivers, must be received by the GSP Subcommittee of the Trade Policy Staff Committee no later than Wednesday, June 18, 2008. Petitions requesting CNL waivers must be received by the GSP Subcommittee of the Trade Policy Staff Committee no later than Thursday, November 13, 2008, in order to be considered in the 2008 Annual Review.

Interested parties, including foreign governments, may submit petitions to: (1) Designate additional articles as eligible for GSP benefits, including to designate articles as eligible for GSP benefits only for countries designated as least-developed beneficiary developing countries, or only for countries designated as beneficiary sub-Saharan African countries under the African Growth and Opportunity Act (AGOA); (2) withdraw, suspend or limit the application of duty-free treatment accorded under the GSP with respect to any article, either for all beneficiary developing countries, least-developed beneficiary developing countries or beneficiary sub-Saharan African countries, or for any of these countries individually; (3) waive the "competitive need limitations'' for individual beneficiary developing countries with respect to specific GSP-eligible articles (these limits do not apply to either least-developed beneficiary developing countries or AGOA beneficiary sub-Saharan African countries); and (4) otherwise modify GSP coverage.

The U.S. GSP program is designed to promote economic growth in the developing world and provides preferential duty-free entry for thousands of products from 131 designated beneficiary countries and territories.

Labels: GSP

Today's mark-up of H.R. 5264, the Trade Preference Extension Act of 2008, by the House Ways and Committee took an interesting last-minute twist. Rather than extending the Andean Trade Preference Act (ATPA), Caribbean Basin Initiative (CBI) and Generalized System of Preferences (GSP) programs until September 30, 2010 as originally proposed, Chairman Rangel (D-NY) agreed to amend the bill by extending only the Andean Trade Preference Act until the end of this year. ATPA expires on February 28th.

The Ways and Means Committee subsequently agreed to approve the amended language of H.R. 5254 by a voice vote. The bill is expected to be considered by the full House during the week of February 25th.

House Republicans balked at the proposed two-year extension of ATPA since they want the House to vote on the U.S.-Colombia Free Trade Agreement as soon as possible.

As a result of this compromise, the extension of the CBI and GSP programs will have to wait until new legislation is introduced or is included in some other legislative vehicle later this year.

The text of the amended version of H.R. 5264 can be found here.

Labels: ATPA, GSP

The House Ways and Means Committee will meet at 11 a.m. on February 14, 2008 to mark-up H.R. 5264, the Trade Preference Extension Act of 2008. As previously reported, H.R. 5264 would extend the Andean Trade Preference, Caribbean Basin Initiative and Generalized System of Preferences programs, all of which are scheduled to expire this year, until September 30, 2010.

Update: The hearing has been changed to 9 a.m. on February 14th.

Labels: Congress, GSP

House Ways and Means Committee Chairman Charles B. Rangel (D-NY) last week introduced H.R. 5264, the Trade Preference Extension Act of 2008, a bill that would extend three trade preference programs scheduled to expire this year.

H.R. 5264 would would extend the following trade preference programs until September 30, 2010:

• Andean Trade Preference Act (ATPA) – Expires on February 29, 2008. ATPA was enacted in 1991 to combat drug production and trafficking in the Andean countries of Bolivia, Colombia, Ecuador and Peru. The program offers trade benefits to help these countries develop and strengthen legitimate industries. ATPA was expanded under the Trade Act of 2002 and is now called the Trade Promotion and Drug Eradication Act. ATPA provides duty-free access to U.S. markets for approximately 5,600 products.

• Caribbean Basin Initiative (CBI) – Expires on September 30, 2008. The following nineteen countries benefit from Caribbean Basin Initiative (CBI) : Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin Islands, Costa Rica, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Netherlands Antilles,Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago.

• Generalized System of Preferences (GSP) – Expires on December 31, 2008. GSP provides preferential duty-free entry for more than 4,650 products from 143 designated beneficiary countries and territories. H.R. 5264 also addresses a number of issues with the textile provisions of the African Growth and Opportunity Act (AGOA) and the competitive need limitation waiver provisions of GSP.
  

The renewal of ATPA benefits is particularly important to Peru and Colombia, countries that the U.S. has entered into free trade agreements with. However, the U.S.-Peru Trade Promotion Agreement (TPA), which was passed by both countries in 2007 will not take effect until both countries adopt the appropriate implementing regulations. While it has typically taken approximately eight months for the U.S. to implement most other free trade agreements after they were passed into law, reliable sources have indicated that the U.S.-Peru TPA will not take effect until January 1, 2009. The U.S. Congress has not yet passed the U.S.-Colombia FTA and prospects for its passage in Congress this year look dim . Renewing ATPA benefits for Bolivia and Ecuador have faced resistance in Congress because of the anti-U.S. actions both countries have taken in the past few years.

Labels: Free Trade Agreements, GSP

The Office of the U.S. Trade Representative (USTR) yesterday announced the results of the 2006 Annual Review of the Generalized System of Preferences (GSP). As a result of the review, USTR terminated GSP eligibility for 21 products and granted waivers of the competitive need limitations on 115 products.

The 21 products were removed from the GSP program because they "can compete effectively in the U.S. market". Among the products that will be removed from GSP eligibility are: brake and brake parts and ferrozirconium from Brazil; kola nuts from Cote d’Ivoire; gold jewelry and brass lamps from India; wiring harnesses from the Philippines; gold jewelry from Thailand; and methanol from Venezuela. The 2006 import value of the products removed from GSP eligibility was approximately $4.8 billion. Total U.S. imports from beneficiary developing countries under the GSP program in 2006 were $32.6 billion, a 22% increase over 2005.

A PDF document containing a complete list of the products that were removed and added to the GSP program (and their corresponding HTS numbers can be found at the following link.

Labels: GSP, USTR